Integrated Care: Opportunities for Manufacturers
May 13, 2014
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Introductions
• Leader in Bain’s Healthcare practice
• 20 years experience consulting/ executive roles
• Consulting work focused on clients in the pharmaceutical, med tech, vaccines and diagnostics industries as well as not-for-profit global health organizations
- Recent work in development of corporate and business unit strategies, product launch and growth strategies, organizational design/capability building and go-to-market models.
• Executive roles in Medical Diagnostics at Sanofi and Boehringer Mannheim (now Roche)
• MBA at INSEAD; MSc. in Molecular Biology and BSc. in Biochemistry from the University of Waterloo, Canada
• Recent Bain Brief publications on “Healthcare 2020” and “Integrated Care: Implications for Pharma and Medtech”
Michael RetterathPartnerNew York
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 3NYC IntegratedCareDiscussion_2014_05_12
Agenda
• Overview of Bain Healthcare Practice
• Sector trends towards Integrated Care and implication for manufacturers
• Path forward for manufacturers
• Discussion/Q&A
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 4NYC IntegratedCareDiscussion_2014_05_12
Global network to serve client needs
New Delhi
Helsinki
Dubai
Frankfurt
New York
BostonSan Francisco
Paris
London
MunichTokyo
Rome
Chicago Toronto
Houston
Beijing
Hong Kong
Singapore
Sydney
Madrid
Stockholm
Mexico City
Los Angeles
Atlanta
São PauloJohannesburg
Seoul
Amsterdam
Palo Alto
Melbourne
Shanghai
Brussels
Düsseldorf
Kyiv
Moscow
Zurich
Milan
Buenos Aires
Mumbai
Oslo
Copenhagen
DallasBangkokKuala Lumpur
Perth
Rio de Janeiro
Istanbul
Warsaw
5,400 EMPLOYEES ACROSS 49 OFFICES
Washington, D.C.
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We take an integrated view of healthcare across sectors to provide deep customer and stakeholder insight
Integrated view of
healthcare
Payers
Pharma Med tech
ProvidersServices
Changes in one sector can impact othersTrends impacting one sector can emerge in others
Expertise in one sector = customer/stakeholder expertise in others
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 6NYC IntegratedCareDiscussion_2014_05_12
This expertise is made stronger by our heavy involvement in healthcare deal activity
Bain serves cases in all major segments of healthcare…
• Cardiac devices• Aesthetic lasers• Imaging equipment and
media• Medical appliances
and supplies• Outsourcers• Contract manufacturers• Diagnostics
…including 350+ diligence assignments for financial investors over the last decade
Consumer health• Eye glass lenses• Hearing aids• Vitamin supplements• Personal care products• Nutritional
supplements• OTC pharmaceuticals• Health food
Med Tech
Providers• Hospitals• Imaging Centers• Eye Surgery• Healthcare/ physician
practice management• Dental physician
management• Counseling services• Urgent care centers• Ambulatory surgery
centers• Post acute care centers
Services• Travel nursing• Out-sources blood
testing• I/T hardware,
software, PACS, etc.• Lab services• Infusion• Personal hygiene
services• Radiology services• Dental products and
distribution
Payers• Regional Payers• Regional and national
payer systems• Third-party
administrators• Disease management
• Drugs (primary and specialty care)
• Reagents• Genomics• Generics• Contract research• Contract manufacturing• Animal pharma
Pharma/Biotech
0
20
40
60
80
100%
HC Cases(including due diligence)2002-2012
Sub-sector
Pharma/Biotech
Due Diligence
Med Tech
Healthcare Payer
HealthcareProvider
Healthcare Services
1,170
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 7NYC IntegratedCareDiscussion_2014_05_12
Agenda
• Overview of Bain Healthcare Practice
• Sector trends towards Integrated Care and implication for manufacturers
• Path forward for manufacturers
• Discussion/Q&A
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 8NYC IntegratedCareDiscussion_2014_05_12
Executive Summary
• Traditional model for HC delivery (siloed care, fee-for-service) has led to cost inflation without commensurate improvement in clinical outcomes or patient experience
• Recognition of untapped value in managing across care pathways: i.e.: “Integrated Care”…- New “S-curve”, with potential to improve quality, experience and cost of care
- Enabled by trends in provider consolidation, advances in IT/communications, increased role of consumer, etc.
• Value creation derived from a number of key drivers:- Improving integration of patient data across points of care (better care, less waste)
- Enabling patient prevention/adherence (reduced events, improved outcomes)
- Facilitating shift of care to better value locations (more convenient, lower cost, equal/higher quality)
• Models largely converging around two patient-based “units of integration”, each with its own clinical and economic logic and associated metrics
- Episode of care, e.g.: CABG procedure
- Continuous care: e.g.: A-fib, diabetes, elderly
• Implications for Pharma and Medtech companies still emerging but with clearly identifiable priorities for investment and exploration
- Clear implications on clinical design, marketing messages and commercial model- Less clear on market acceptance and value of “integrated solutions”- Specific categories rise to the top, (e.g. Diabetes and heart failure)
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 9NYC IntegratedCareDiscussion_2014_05_12
Integrated Care must be seen in context of broader trends towards reform
NEED FOR HEALTHCARE REFORM• Rising demand (aging population, chronic conditions, uninsured)
coupled with a restricted ability to pay
Reform: Policy directive based in law reform: Market based initiatives
• Increased access- Medicaid expansion, public exchanges
• CMS reimbursement rates, taxes- ‘Donut hole’ rebate, PCP rate increases, rate cuts for hospitals and post-acutes, Medtech excise tax, etc.
• CMS payment models- Medicare/Medicaid bundled payment pilots, ACOs, etc
• CMS quality initiatives- Re-hospitalization penalties, HCAHPS, etc.
• Changes in employer attitudes about benefits
- High deductible plans, private networks, narrow networks, etc.
• Health plan product/benefit design- Network strategy, gatekeeper, tiering, compliance incentive, etc.
• Commercial plan payment reform- P4P, bundled/global payments, etc.
• Incentives to delivery system to change its operating model
- ACOs, PCMHs, etc.
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 10NYC IntegratedCareDiscussion_2014_05_12
A number of market trends are driving shift in care towards more integrated models for care
New models for care delivery, consumption and reimbursement
MARKET- and POLICY BASED REFORM
‘CONSUMERIZATION’ OF HEALTHCARE
• Consumers more economically sensitive around utilization and provider choice
• Consumer increasingly enabled in healthcare decisions
- Readily available information on disease, treatment, providers, etc.
IT / COMMUNICATIONIMPROVEMENTS
• Advances in ability to generate and leverage data
- Including predictive analytics, data-driven protocols, patient monitoring, etc.
STRUCTURAL ANDATTITUDINAL SHIFTS
• Rise in physician employment
• Physicians becoming more economically sensitive around utilization and referrals
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 11NYC IntegratedCareDiscussion_2014_05_12
Physician practice ‘land grab’ underway, increasing integration with hospitals and other stakeholders
Source: The Advisory Board Company - Physician Compensation and Production Survey, Medical Group Management Association 2002-2010 data; 2011 survey; 2012 The Health Care Services Acquisition Report, Irving Levin Associates
IN RECENT YEARS, PHYSICIAN EMPLOYMENT HAS ACCELERATED
0
20
40
60
80
100%
Physician Practice Ownership,2002-2011
2002
Phys
icia
n-ow
ned
pr
actic
e
2003
2004
2005
2006
2007
2008
2009
2010
2011
Hos
pita
l-ow
ned
prac
tice
PLAYERS ACROSS THE INDUSTRY ARE MOVING TOWARDS INTEGRATION
Acquirer TargetYear
Price
Pay
er Metropolitan Health:Network of ~480 PCP practices serving 70K+ patients
2013
$850M
Hos
pit
al Carle Clinic: Deal included network of 300+ physicians and subsidiary health plan with 320K members
2010
$250M
Pro
vid
er HealthCare Partners: 152-clinic network with over 8,300 contracted PCP and multi-specialty physicians
2012
$4.4B
Ph
arm
acy Scott & White Healthcare:
Partnered with system of 12 hospitals, 65 clinics to share governance and create one of the first pharmacy-led ACOs
2013
N/A
Ser
vice
s US Oncology: Largest US integrated oncology provider with over 1,300 affiliated community-based physicians
2010
$2.2B
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 12NYC IntegratedCareDiscussion_2014_05_12
Level of integration varies considerably by geography; particularly challenging for manufacturers
*Includes Medicare Shared Savings, Pioneer, Advanced Payment, and certain commercial payer/provider funded ACO programsNote: Data as of February 2013. Data will need to be refreshed frequently as new ACOs are continually being addedSource: American Hospital Association, Leavitt Partners Center for ACO Intelligence report ”Growth and Dispersion of Accountable Care Organizations” (June 2012), CMS.gov
BUNDLED PAYMENT PROGRAMS BY TYPE
Model 1: Retrospective Acute Care Hospital Stay Only, does not have episode breakoutsModel 2: Retrospective Acute Care Hospital Stay plus Post-Acute CareModel 3: Retrospective Post-Acute Care OnlyModel 4: Acute Care Hospital Stay Only
PRELIMINARYPREVALENCE OF ACOs* VARIES BY STATE
PRESENCE OF BUNDLED PAYMENT INITIATIVES VARIES BY STATE /URBAN SETTING
NUMBER OF ORGANIZATIONS WITH ACO-LIKE PAYMENT STRUCTURES PER 1M INSURED CITIZENS
52
0197
6
2
82
149
3
5
6
9
77
9
1
11
22
364
11
6
4
17
33
9
73 1
32
0
71
2
1
6
0
00
1
0
0 1
0
4
5+
<5
<2
<1
# BPIs/M
0
0
• 2+• 1 - 1.99• 0.50 - 0.99• 0 – 0.49
Number in state indicates absolute number of ACOs present
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 13NYC IntegratedCareDiscussion_2014_05_12
Physicians' expectations point to a trend towards new payment models…
Q: Please describe your participation in the following payment models.
Note: 2011 data included for comparison purposes only; populations of 2011 and 2013 surveys not comparable; excludes physicians who responded “don’t know/can’t answer”
Source: Bain Feb 2013 PCP survey, N=414; Bain 2011 survey, N=158
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 14NYC IntegratedCareDiscussion_2014_05_12
Emerging models connect providers to address the highest-value gaps in care
ASC
Home care
Pharm-acy
Hosp.
Spec-ialist
PCPRehab
Providers
Episode of care Continuous care
• Focus on better managing events by bundling pre- and post-procedure activities into holistic program
- Treat (and price) as one vs many events
- Maintain or enhance quality while reducing cost and improving convenience
• Incentivized by bundle payment initiatives, readmission penalties
• Focus on avoiding events by better connecting points-of-care
- Reduce duplication and waste
- Improve clinical outcomes
- Enhance patient and physician experience
• Enabled by capitated payment programs at ACOs and ICNs
- Price actuarially defined for given population
Patient
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 15NYC IntegratedCareDiscussion_2014_05_12
Gov'tEmpl-oyer
TPA
Episode of Care: provider offering a bundled payment and better outcomes for CABG patients
• Patient type: CABG patients, from admission through 30 days post-op
• What activities: - All hospital care, specialty care, labs/imaging, rehabilitation
- Protocol design for suite of heart procedures- Flat fee and claims management
• What customers: Covers 1.6M nationally, including Lowe’s, Kohl’s, Rich’s, Boeing; now added Walmart
Scope:
• Improve clinical outcomes by using defined protocols, reducing variance in treatmentsPhar-
ma
OTC
Med tech
Services Mfg’er
Payer
PROVIDER INTEGRATING RISK MANAGEMENT CAPABILITIES
Provider
• Triple aim results: Patients overwhelmingly rate program as “excellent” and would recommend to a coworker; Lowe’s has reported savings of up to $62K in one patient example
• Profitability: Expand reach to other geographies
Continuous careContinuous care
Episode of care
Patient
Insur-er
Labs, imag-
ingRemote Monitor
-ing
HIE
Well-ness
Data analy-
tics
ASC Pharm-acy
Spec-ialist
Home care
PCPRehab
Hosp.
Nutra-ceutical
Results and Profitability
Objectives:
Note: *Relationships with health plans and employers is managed by the Cleveland Clinic’s Department of Market and Network Services Source: Bain proprietary analysis
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 16NYC IntegratedCareDiscussion_2014_05_12
Continuous Care: Payer acquiring PCP practice and using analytics to improve outcomes, lower costs
Patient
Med tech
Phar-ma
Nutra-ceutical
OTC
HIE
Med tech
HIE
Well-ness
Services Mfg’er
Provider
Payer/Adm.
Data analy-
tics
Remote Monitor
-ing
Gov't
Empl-oyer
Insur-er
ASC
Rehab
Home care
Spec-ialist
Labs/Imag-
ing
Phar-macy
PCP
Hosp.
INSURER ACQUIRING PCPS AND BIG DATA ANALYTICS CAPABILITIES
Episode of careEpisode of care
Continuous care
• Patient type: Complete care for 200K patients aged 65+ with complicated conditions
• What activities: - Primary care, clinics, nurse case managers- Protocol design for patient types- Incentivized physician contracts- PBM: Zero-dollar co-pays on tier 1 and 2 drugs- Vitality behavior management toolkit
• What customer: Medicare Advantage enrollees
What’s in scope:
• Improved clinical outcomes by investing in long term outcomes through nurse case managers, in-home visits
• Aligning with physicians for value based decisions through innovative contracts
• Optimizing treatment plans through big data
• Triple aim results: 20% decrease in acute care visits and 11% decrease in costs compared to Medicare. 3.12 average star rating
• Monetization: Humana profit margins 50% higher than competitors in Florida; strong share gain
Results and Monetization
Objectives:
PBM/TPA
Source: Bain proprietary analysis
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 17NYC IntegratedCareDiscussion_2014_05_12
Role for manufacturers in integrated care is still being defined
Hosp. Spec. PCP Rehab. HomeCare
Episode of care
Hosp. Spec. PCP Pharm-acy
HomeCare
Continuous care
• Facilitate alignment and shifting of care across centers
- Consistent with bundled payment models
• Elements of package could include:- Devices, Rx, monitoring tools
- Protocols, analytics
- Post-acute care support
• Potential for risk-sharing contracts structured around episode
• Customer is payer/provider
• Facilitate patient adherence / early intervention
- Consistent with capitated payment models
• Elements of package could include:- Rx, devices, monitoring tools
- Protocols, analytics
- Care coordination, outreach
• Potential for risk-sharing contracts structured around patient population
• Customer is payer/provider, employer, consumer
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 18NYC IntegratedCareDiscussion_2014_05_12
A set of key factors drive potential for integrated solutions for a given condition
FACTORS FAVORING IC SOLUTIONS
Patient
Med tech
Phar-ma
Nutra-ceutical
OTC
HIE
HIE
Well-ness
Services Mfg’er
Provider
Payer/Adm.
Data analy-
tics
Gov't
Empl-oyer
PBM/TPA
Insur-er
ASC
Rehab
Home care
Labs/Imag-
ing
Phar-macy
PCP
Hosp.
Remote Monitor
-ing
Spec-ialist
Med tech
Provider• Gap in meaningful patient information to
enable better treatment
• High variability in treatment models• Distinct provider group for patient
population
Payer• High cumulative cost of disease
• Multiple levers to realize cost savings
• “Difficult” disease: uncomfortable treatment choices for payers
Episode of careEpisode of care
Continuous careContinuous care
Source: Bain proprietary analysis
Patient• Variability in patient behaviors impacts
cost/clinical outcomes• Fragmented care system with multiple
touch points per patient
• Unmet need for additional patient support (e.g., informational, emotional, financial)
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 19NYC IntegratedCareDiscussion_2014_05_12
Continuous Care (pharma): Sanofi is offering a full suite of diabetes care to drive adherence, share gain
What’s in scope:
• Facilitate communication and coordination of care by increasing frequency of data to providers
• Address compliance by offering integrated tools, e.g. wellness and home health mobile apps, that make it easier for patients to stay on track
Patient
Nutra-ceutical
OTC
Services Mfg’er
Payer/ admin
PHARMA EXPANDING INTO MEDTECH, SERVICES AND PROVIDER SILOS
Provider
• Triple aim results: 10% reduction in HbA1C results and support from patients
• Monetization: New revenue stream in testing devices as well as Lantus share gain
• Patient type: Chronic condition – diabetes
• What activities: - Pharma: Market leading insulin drug (Lantus)- Wellness: Go Meals provides nutritional information,
tracks glucose and activity levels- Med tech, monitoring: Smart glucose monitor,
connects to iPhone; data sent to doctor- Home care: Web-based mgmt system to allow
personalized care and enable dose adjustments
• What customer: Diabetes patients, payersMed tech
Remote Monitor
-ing
Well-ness
Home care
Phar-ma
Gov'tPBM/TPA
Insur-er Results and Monetization:
Objectives:
HIE
Data analy-
tics
Dx/labs/Imag-
ing
ASC
Spec-ialist
Hosp.
PCP
Pharm-acy
Empl-oyer
Rehab
Episode of careEpisode of care
Continuous care
Source: Bain proprietary analysis
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 20NYC IntegratedCareDiscussion_2014_05_12
Agenda
• Overview of Bain Healthcare Practice
• Sector trends towards Integrated Care and implication for manufacturers
• Path forward for Pharma companies
• Discussion/Q&A
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 21NYC IntegratedCareDiscussion_2014_05_12
Companies are beginning to adjust their operating and business models to adapt to the new environment…
OPERATING MODEL BUSINESS MODEL
R&D Manufacturing/Operations
Commercial-ization Diagnosis TreatmentOrigination Monitoring
• Design for patient experience
• Focus on cost-reduction in manufacturing, incl. ‘asset light’ models
• Segment-specific insights
• Customized “B2B” approach for organized customers
• Enhance “evidence package” with real-world data and population metrics
• Consolidate logistics to serve larger accounts
• Enhanced consumer engagement
• … • … • …
Redesign or ‘clean sheet’current activities
Adjacency moves and re-invention of overall business model
Products
Applicat-ions
Services
Extend to other areas
of care continuum
Develop applications and
services within a stage of the
patient journey
1
2
Current
Source: Bain analysis
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 22NYC IntegratedCareDiscussion_2014_05_12
Operating Model: market evolving towards a “rubixcube” across payer, provider and patient dimensions
PROVIDERS
PAYERS
• Public vs commercial
• Use of PBMs
• FFS vs capitated pharm / med benefits
• Share/mix of lives from exchanges
• Level of integration –e.g., doc employment
• Exposure to pharm benefits risk
• Cost sensitivity (e.g., private exchange buyer)
• Degree of engagement in care decision and management
For each segment, critical to:
• Assess company performance- % revenue, profits- Market share- Price realization
• Understand needs, incentives and influence patterns of the players
• Determine full potential, and specific strategy- Areas to double-down, pull back- Where to change value proposition
and/or commercial approach
• Translate strategy to local market implications
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 23NYC IntegratedCareDiscussion_2014_05_12
Operating Model: illustrative examples of potential integrated segments
Payers • Commercial payer with drug benefits outsourced to PBMs
• Commercial payer offeringfully insured products (incl. drug benefits)
• Mix skewed toward exchange plans
• Commercial payer administers plan but takes no risk – i.e., fully capitated payments to providers (incl. drug benefits)
Providers • Independent physician group operating on FFS basis
• Independent physician group operating on FFS basis
• Doc employed with accountable care organization
Patients • Employer provided group plan with low deductible, co-pay
• Limited engagement –relying on doc advice
• Cost sensitive patients purchase plans through private exchange, semi-funded by employers
• Highly engaged patient,seeking information on care
SEGMENT 1 SEGMENT 2 SEGMENT 3
Traditional commercial approach
Opportunity to align incentives with
providers
Opportunity to customize offerings to payers and patients
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 24NYC IntegratedCareDiscussion_2014_05_12
Business Model: three key questions can help frame the opportunity for integrated care solutions
• Where are the highest-impact pain points in the care pathway?- Drop-offs, inconveniences,
economic loss, etc.
• For the key pain points:- What behavior change is
required?- What are incentives / dis-
incentives to act?- What are key enablers of
change?
• Which customer segmentsare most open to change?
Are there significant unmet needs for care integration?
Do we have distinctive assets / competencies?
Is there a viable business model to capture value?
1 2 3
• How far from the core do we need to go?
- Product vs. solution; open vs. closed system
• How do we gain access to required assets /capabilities?
• How do we monetize value?
- Direct: new revenue streams, increased share, higher prices
- Indirect: customer insights/loyalty, lower commercialization costs etc.
• What assets can we bring to bear?
- Hard: clinical expertise, technology, sales infrastructure, etc.
- Soft: market leadership, KOL relationships, reputation, regulatory insight
• Where are we most uniquely positioned?
- Who else could do?
- What are barriers to entry?
• What new capabilities would we need to build?
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 25NYC IntegratedCareDiscussion_2014_05_12
Economic benefits that can be captured vary by disease state: Heart Failure example
0
20
40
60
80
100%
Hospitalization
Outpatient
Admission
Readmission (within 30 days)
$17B
Other services
Nursing Home
Physicians/OtherProfessionals
Home Health Care
$10B
Drugs
Betablockers,
ACEinhibitors,
etc.
$4B
Devices
CRT
VAD
IABP
$3B
US expenditure on heart failure treatments (2012) Total = ~$35B
Note: Cardiac resynchronization therapy (CRT), ventricular assist device (VAD), intra-aortic balloon pump (IABP); Admission rates for HF patients are 75-90%; Not all readmissions are addressable for cost savings due to high prevalence of comorbiditySource: Medtech Insights, March 2012; Cowen Therapeutic Categories Outlook 2013; Global Data CHF report 2012; The Economics and Reimbursement of Congestive Heart Failure, 2012 (Adapted from AHA Cardiovascular Diseases in the United States, 2009); Patterns of hospital performance in acute myocardial infarction and heart failure 30-day mortality and readmission, Circ Cardiovasc Qual Outcomes, 2009
Drugs DevicesServices
Direct costs
ILLUSTRATIVE
…policy-mandated
reduction in 30-day
readmission
…decreasing number of non-urgent hospital
admissions
Cost savings driven by…
1
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 26NYC IntegratedCareDiscussion_2014_05_12
Chronic conditions where patient behavior plays a key role in outcomes are often seen as best candidates
Q: Please rate the following chronic conditions on how likely integrated care is to be able to improve costs, clinical outcomes, and/or the patient and provider experience.
Note: Excludes physicians who responded “don’t know/can’t answer”Source: Bain Feb 2013 PCP survey, N=414
1
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 27NYC IntegratedCareDiscussion_2014_05_12
Integrated care will require deployment of new tools, some of which manufacturers could support…
Q: Please describe your use of the following clinical tools.
Note: 2011 data included for comparison purposes only; populations of 2011 and 2013 surveys not comparable; version of slide for external use in Appendix; excludes physicians who responded “don’t know/can’t answer”; bold indicates potential role for manufacturers
Source: Bain Feb 2013 PCP survey, N=414
2
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 28NYC IntegratedCareDiscussion_2014_05_12
0
20
40
60
80%
Remotemonitor-
ing
51%
23%
Tele-medicine
46%
23%
Wellnessprogr-ams
37%
47%
Casemgrs
32%35%
Treatmentteams
29%30%
Adher-ence
initiatives
28%
57%
Dataanalytics
42%
31%
Evidence-based
protocols
37%40%
Compeffective-
ness
33%32%
Transpar-ency
initiatives
31%34%
Sharedsavings
29%27%
26%23%
25%23%
Percent of physicians stating interest in pharma/med tech solution
Bundledpayment,condition
Bundledpayment,episode
… and medtech and pharma companies are viewed as potential partners for some integrated solutions
Q: For each of the following integrated care initiatives, please check whether you would be interested in a program offered and managed by a pharmaceutical/medical device company
Source: Bain Feb 2013 PCP survey, N=414
Clinical care extenders Clinical decision-making Payment models
2
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 29NYC IntegratedCareDiscussion_2014_05_12
However, many physicians expressed concerns related to bias and lack of transparency
“Some aspect of mercenary motivation exists for certain services/plans, but by employing more physicians and working closely with these companies hopefully it will help with decision making and is aligned with patients' best interests.”
General practitioner
“There clearly becomes a conflict of interest when companies are involved in the process of delivering health care. I feel these companies have a role in clinics and hospitals, but do not feel that role should encompass healthcare delivery.”
Internist
“I always worry about these companies worrying about the "bottom line" first and compromising the patient’s healthcare for a profit.”
PCP
“I would not have any concern with medical device companies but I am not sure about a conflict of interest when a pharmaceutical company is involved.”
Family practitioner
Source: Bain Feb 2013 PCP survey, N=414
PRELIMINARY
2
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 30NYC IntegratedCareDiscussion_2014_05_12
US HEALTHCARE PROFIT POOLS TO 2020
For manufacturers, integrated solutions require moving into lower margin (but faster-growing) profit pools
Source: Bain analysis
= Products
= Services
3
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 31NYC IntegratedCareDiscussion_2014_05_12
Integrated perspective continuing to drive insights into emerging healthcare market
Strategic Choices
Payers
Pharma Med tech
ProvidersServices
• Segmentation and engagement models with Payers/Providers• Development of integrated value propositions and monetization models• M&A screening and development of alliance programs• Etc.
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 32NYC IntegratedCareDiscussion_2014_05_12
Agenda
• Overview of Bain Healthcare Practice
• Sector trends towards Integrated Care and implication for manufacturers
• Path forward for Pharma companies
• Discussion/Q&A
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 33NYC IntegratedCareDiscussion_2014_05_12
Thank You!